The Shrinking Office Space May Not Be a Permanent Trend
The perceived trend toward reduced use of office space, while evidently true in the short term, may not prevail in the long term. A new survey conducted by CoreNet Global finds that global companies are currently using less office space than when the pandemic began, but many expect to increase the amount of space they occupy over the next one to five years.
Conducted last month, the survey yielded more than 300 responses from North America, Europe, Asia and the Middle East. Asked whether their companies were currently using less space than in March 2020:
45% of respondents said they were using 0-10% less space less space than in March 2020
12% said they were using 10-20% less space
12% said they were using 20-30% less space
16% said they were using more than 30% less space
15% said they had increased the amount of space they are currently using, compared to March 2020
That being said, many corporate real estate managers expect their portfolios to grow over the next five years. Forty-one percent said they would in fact increase the amount of space they are using, while 60% predicted a net decrease.
Respondents replied as follows when asked “How do you anticipate your company’s portfolio to change in the next one to five years, when compared with the amount of office space your company currently uses?”
17% said space would increase by 0% – 10%
11.5% said space would increase by 10% – 20%
5.5% said space would increase by 20% – 30%
7.2% said space would increase by more than 30%
22% said space would decrease by 0% – 10%
17% said space would decrease by 10% – 20%
12% said space would decrease by 20% – 30 %
8% said space would decrease by more than 30%
Yet, whether the actual space usage goes up or down, it’s likely that how it’s used will be different in the future. In a blog posting to the CoreNet Global website, EY notes that the EY Work Reimagined Survey 2021 shows that almost four of five (79%) employers plan to make moderate to extensive changes to allow for more hybrid working.
“They are pushing at an open door because 90% of employees responding to the same survey are looking for greater flexibility in when and where they work,” according to EY.
These results dovetail with insights from the EY Future Workplace Index 2021, in which 87% of employers say the pandemic has permanently changed the needs of the physical office. The immediate implications of hybrid working have focused on the physical office, with 75% of companies anticipate having no central office location long-term, and 84% of companies are adjusting their plans for real estate use.
“Increasing investment in technology both in the office and in the cloud are priorities, as is the need to focus on the office as a collaborative space, promoting creativity,” according to EY.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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